The Cost of the U.S. Sugar Program Revisited

John C. Beghin, Barbara El Osta, Jay R. Cherlow and Samarendu Mohanty

No 18431, Hebrew University of Jerusalem Archive from Hebrew University of Jerusalem

Abstract: We revisit the cost of the U.S. sugar program by analyzing the welfare implications of its removal. We use a multimarket model of U.S. sweetener markets, which includes raw crops, sugar extraction and refining, high-fructose corn syrup, and sweetener users (food-processing industries and final consumers). Our approach addresses the industrial organization of food industries using sweeteners and treats the United States as a large importer. We estimate that, with the removal of the program, cane growers, sugar beet growers, and beet processors would lose $307 million, $650 million, and $89 million (1999 prices), respectively. Sweetener users would gain $1.9 billion (1999 prices). The deadweight loss of the current sugar program is estimated at $532 million (1999 prices). World prices would increase by 13.2 percent with the removal of the program.

Keywords: Agricultural; and; Food; Policy (search for similar items in EconPapers)
Pages: 31
Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:ags:hebarc:18431

DOI: 10.22004/ag.econ.18431

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